When it is time to fill an executive position, hiring and recruiting managers may find themselves asking, “How much will hiring a new employee cost?”
It is natural to think of that question in direct monetary terms such as an employee salary, benefits, training, relocation costs and possibly a sign-on bonus. But there are other indirect hiring costs to consider when searching for that right employee, especially if a vacant position is being filled.
The total cost of hiring one new employee could be as high as $5,000 or more, varying by industry.
So how can some of these hiring costs be avoided? Perhaps more importantly, how can a bad hire be prevented? Here are four ways an executive recruiting firm, like Govig & Associates, can help offset those indirect costs.
1. Give back time
A candidate should no doubt be a good technical match for their position, but also be a good fit culturally within a company. After all, an employee can be a company’s biggest competitive advantage and brand advocate. But finding that right fit takes time – even more so at the executive level.
The average time to fill a position could be as little as two weeks and as much as two months. It’s commonly known that time = money, so when staffing talent internally proves to be too time consuming it can be costly. Outsourcing the recruiting process could be the most effective method for hiring a quality candidate.
2. Provide sufficient talent intelligence
Positions listed on an employment website can be time consuming to monitor and update. They can also be ineffective in attracting the right person because the ideal candidate may be currently employed.
Many times the most qualified candidates may not be actively seeking a job, so a passive approach like a job board most likely won’t get their attention.
An extensive recruiting network of qualified talent in the right industry can be the key to locating the ideal applicant for the position. Bear in mind, it’s not about finding a long list of resumes that may fit the job description; it is about searching for those few potential candidates and then securing the right person for the position.
“The benefit of being hands-on within niches every day gives recruiters a great advantage of understanding and proactively reacting to changes,” said executive recruiter Jim Capelle. “Companies rely on recruiters to provide the highest level of talent to help build their companies and we strive to stay in tune with that pulse to continue to be the leader in a specific market.”
3. Reduce chances of turnover
Ultimately, a new hire should not only fill a position but also help a company move business forward. Recruiters look beyond the skills and qualifications bulleted on a resume. They assess the candidate holistically, ask the tough questions, take into account current and past jobs, references and behaviors to help predict whether or not the candidate will be the right fit and ultimately reduce the chances for turnover.
It is predicted that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. When you think about the time-to-fill being between two weeks to two months, the cost margin is huge!
A study by American Center of Progress found that the average cost to replace a highly educated executive position could be 213% of their salary. For example, the cost to replace a $100k CEO is $213,000.
4. Foster relationships for future hiring success
Getting into a new relationship is always tough, but the information shared by utilizing the services of an executive search firm can build rapport with a firm’s recruiters to create a more streamlined experience the next time a company is in need of a new hire.
By the second, third and fourth hire, recruiters are more knowledgeable of the company, its goals, expectations and culture. A faster search and placement time can mean less hiring costs (both money and time) spent internally.
Are you in need of executive recruitment services? Learn more about Govig & Associates by checking out our LinkedIn Company Page and get in touch with a recruiter today.